Is Electric Car Insurance More Expensive?

Electric vehicles typically cost more to insure, but the overall lower costs of owning an EV outweigh the higher insurance premiums. Comparing quotes can help you save.
Written by Jaya Anandjit
Edited by Jessica Barrett
Electric vehicle (EV)
car insurance
costs more, but EVs are typically more affordable to own. Comparing quotes from different providers can help you find the lowest rate for your EV coverage.

Is insurance really more expensive for electric cars?

Car insurance is typically more expensive for electric cars, but rates vary depending on your EV model and driver profile.
EV insurance costs an average of $2,290 per year for full coverage and $2,041 per year for minimum protection. This average considers rates for both mainstream and luxury green vehicles, as well as both fully electric (EV) and plug-in hybrid electric vehicles (PHEVs).
In general, hybrid vehicles tend to be cheaper to insure than EVs and PHEVs, but your overall EV insurance costs will vary depending on several factors: 
  • Your vehicle type and MSRP
  • Your average monthly mileage
  • Your age and marital status
  • Your credit score
  • Your driving record

Do electric cars need special insurance?

EVs don’t require special car insurance coverage, although some companies—like Lemonade—offer EV-specific roadside assistance and additional coverage for in-home wall chargers. 
Like most cars, electric vehicles typically benefit from a full coverage policy with
liability insurance
,
collision coverage
, and
comprehensive insurance

Estimating the cost of electric vehicle ownership

Generally, electric car insurance costs more than coverage for the average gas-powered vehicle—but the benefits of owning an EV tend to outweigh the insurance costs for most motorists. 
For example, the
Office of Energy Efficiency and Renewable Energy
finds that the average vehicle lifetime fuel costs for an EV results in savings of $3,000 to $10,500 compared to a non-electric vehicle. 
While EV economics can be tricky to navigate, considering the cost of EV insurance next to maintenance and repair expenses, fuel costs, and tax credits can help you make the best decision for your driving—and budgeting—needs.

Electric car insurance vs. the alternatives

The average cost of EV auto insurance is $3,014 annually for full coverage, although prices vary for hybrid and plug-in hybrid vehicles. For gas-powered vehicles, the average cost of full coverage insurance sits at approximately $2,264 in 2023. 
Vehicle
Average cost of full coverage insurance
$3,114
$2,010
$2,472
Honda Accord LX
(Gas-powered)
$2,196
The average cost of full coverage car insurance for EVs is approximately $750 more than the average cost of full coverage car insurance for a regular car. But if you take a look at the averages listed above, you’ll notice that car insurance varies in price based on the exact type of electric, hybrid, or plug-in hybrid electric vehicle you choose. 
app screenshot
Picking the best EV for your budget will depend on a few other factors, but understanding your potential car insurance costs can help you make the best selection.
The
Jerry
app is a great tool for comparing
car insurance quotes
for different EV, PHEV, and hybrid models as you’re making your decision.

Electric car maintenance and repair costs

The annual cost to maintain an EV is typically cheaper than the cost to maintain a gas-powered vehicle.
The We Predict analytic firm found that it costs $7, on average, for car owners to maintain a battery-powered car in the first year of ownership, whereas owners of gas-powered vehicles spend $30 in the first year. On a longer scale, EV services cost $514 over 36 months while an internal-combustion engine vehicle prices out at $749 for maintenance.
Electric vehicles are more mechanically simplistic and tend to require less maintenance—like oil changes—and issues than standard gas-powered vehicles. In fact, the
U.S. The Department of Energy
affirms that an EV costs 4 cents less per mile to maintain on average. But depending on the issue, Electric vehicles may return higher bills at the repair shop.1
The likelihood of needing to replace an EV battery is typically the same as the chances of running into replacement-level gas-powered engine issues. With this said, the average price to replace an EV battery falls between $3,000 to $18,000 while the cost of a replacement engine is $3,000 to $5,000.
app screenshot
Your maintenance responsibilities may be lower as an EV driver, but it’s still a good idea to keep up with a steady servicing schedule.
You can easily use Jerry to set up maintenance reminders and estimate repair costs to ensure your EV stays in its best shape.

Electric car fuel costs

Fuel costs are one of the driving forces behind the rise of EV ownership, but electric savings depend on your charging habits. 
Vehicle power source
Average cost per 100 miles
Gas powered
$13.80
EV - Charging at home
$4.80
EV - Level 3 DC fast chargers
$14.40
EV - Level 3 DC fast charger with charging network subscription 
$7
While you can certainly save on the cost of fuel with an EV, your charging method will play a huge part in your actual savings. Charging at home is the most cost-efficient option, but choosing to power up at a DC fast charging station without a network subscription can cost more than fueling up at the pump. 

EV and PHEV tax credits

Both electric and plug-in hybrid electric vehicles are eligible for federal tax credits that can bring down the overall costs of owning one. Requirements vary based on your household income, modified adjusted gross income (AGI), and vehicle specifics, but in general:
  • New fuel cell electric and plug-in hybrid vehicles purchased in or after 2023 can get a tax credit worth up to $7,500
  • Pre-owned fuel cell electric and hybrid vehicles purchased in or after 2023 can get a credit of up to $4,000 if bought from a dealer for $25,000 or less2
Most states also offer EV incentives. For example: 
  • New York EV owners can earn an EV Charging Station Rebate for public and private installations of a Level 2 EV charging station
  • New York also offers an EV Rebate Program, which provides up to $2,000 to buy or lease a new eligible electric vehicle3
  • The Arizona Public Service Company offers a $250 rebate to residential buyers who invest in an eligible Level 2 EV charging station4
  • Drivers in California can earn a rebate of up to $4,500 with the Clean Vehicle Rebate Project5
  • Connecticut residents who install a Level 2 Smart charger in 2023 can earn a $500 rebate6

The best car insurance companies for electric cars

Insurance rates vary between green vehicles and drivers. Your insurance premiums will differ based on your driver profile—including your history of claims, traffic violations on your driving record, your location, and your age. The vehicle you drive and your coverage levels also play a role.
Electric vehicles do not require special insurance coverage. A full coverage policy can provide ample protection for your EV. With this said, EV insurance expenses vary between providers, so be sure to compare quotes before you purchase a policy.
The best way to uncover the most affordable auto insurance rate for your EV, PHEV, or hybrid car is by comparing quotes from different providers. Looking at rates from three to five different insurance companies allows you to assess your potential insurance costs and identify the best rate for your EV insurance coverage.

Tesla insurance

Tesla offers an insurance program for Tesla owners in select states.7 Here are some of the perks: 
  • Premiums: With Tesla Insurance, your premiums are determined by your driving safety score, which is assessed by tracking your driving behaviors in the Tesla app. 
  • Resources: Tesla drivers can file claims, change their policy, pay their bills, and access their policy details through the Tesla app. 
  • Non-Tesla insurance: If you also own a vehicle that is not a Tesla, you can insure it through Tesla Insurance if you have an existing Tesla policy.

Lemonade EV insurance

Lemonade offers a multi-beneficial insurance experience for electric vehicle owners. With Lemonade insurance for your EV, you can enjoy the following rewards: 
  • Discounts: Lemonade offers low mileage savings, bundling discounts for auto and homeowners insurance, and various electric vehicle discounts.
  • Coverage: EV drivers can purchase home charging station coverage, portable charger coverage, and EV roadside assistance for tows to a charging station. 
  • Premiums: The Lemonade app uses your mileage and driving habits to price your car insurance rate. Additionally, EVs are typically charged less due to fewer carbon emissions, and Lemonade offers coverage and deductible flexibility to lower your costs.

Can insurance companies turn you down for having an electric car?

EVs typically cost more to insure, and if you have a
luxury vehicle
like a Tesla, not all insurance companies will want to work with you. In most cases, you’ll receive high quotes for your luxury EV insurance. 
That said, major insurers generally provide EV coverage—and some even offer green vehicle auto insurance discounts. To find the right provider and rate for your electric car, you’ll need to shop around and be mindful that your premiums will be higher than the cost to insure a conventional vehicle. 

FAQs

Is an electric car more expensive to insure?

Yes, electric vehicles are typically more expensive to insure than conventional gas-powered vehicles. Hybrid vehicles are usually the cheapest to ensure, but plug-in hybrid electric vehicles can also cost less to cover. The exact rate of your EV car insurance will depend on the specific vehicle, your driver profile, and your provider. 

What is the best insurance company for electric cars?

There isn’t a single company that consistently offers the best insurance rates for electric cars. Providers like Lemonade,
Allstate
, and
State Farm
offer discounts for green vehicles and home charging stations that can help you save on your overall costs. But the best insurer for your EV insurance will depend on your coverage needs, driver profile, and vehicle. 

What is the process for getting electric car insurance?

The process for purchasing electric car insurance is similar to the process for insuring a conventional vehicle. 
Your first step should be deciding how much coverage you need for your electric car. Insurance experts typically recommend purchasing a full coverage insurance policy with liability coverage, comprehensive insurance, and collision coverage. Next, you’ll want to compare quotes from different providers and seek discounts for your electric vehicle or driver profile.

What are the benefits of an electric car?

Electric vehicles typically cost less to maintain, incur lower fuel costs, and tend to perform better than gas-powered vehicles. Additionally, many electric cars are eligible for federal tax credits or state rebates. Above all, electric vehicles release zero emissions and are better for the environment.

What is the difference between electric cars and gas-powered cars?

Gas-powered cars are more mechanically complex and require increased maintenance compared to electric cars. Additionally, EVs produce zero emissions, cost less to operate, and typically perform better due to instant torque. 
On the other hand, conventional vehicles usually have longer driving ranges than EVs and fueling options are currently more widely available. 

Does insurance cover EV battery replacement?

Your EV battery will not be covered by comprehensive coverage. Some insurance providers may offer electric car battery replacement coverage for EVs, but this is not a standard coverage option from the average provider.

Can insurance go down when you buy an electric car? 

In some cases, insurance can go down when you buy an electric vehicle. Electric vehicles typically cost more to insure than a gas-powered car, but it depends on the electric vehicle, the conventional vehicle, the policyholder, and the provider. 
For example, a 30-year-old clean driver who currently drives and insures a 2008 Honda Civic with low safety scores and minimal anti-theft devices may pay less to cover a brand new Nissan Leaf with higher safety ratings, a suite of driver assistance features, and anti-theft technology. 

Does GEICO cover electric cars? 

Yes, GEICO offers insurance for electric cars. You can purchase a GEICO auto insurance policy for an EV and earn a green vehicle discount to help lower your rate. 

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